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Our Political Parties Vacillating Position on Free Trade / Populist Anti-Free Trade Is Nothing New

29 Jan 2018

Mary Ann and I are cleaning out our attic. Boxes and boxes of old children’s toys, various and sundry other stuff arranged in no particular order are being sorted and donated to Goodwill or moved to the ever expanding trash pile. This Saturday morning, we were reminiscing over a set of dishes neatly packed away in wrapping paper. Mary Ann was doing more reminiscing, I was examining the wrapping paper. From the Friday, October 31, 2008 edition of the Wall Street Journal, special CAMPAIGN’08* page, I found this article: “Mood Shift Against Against Free Trade Puts Republicans on Defensive.”

WASHINGTON –  the U.S. has led the way in efforts to lower barriers to global trade since World War II, despite opposition from unions and voters hurt by foreign competition. This election [McCain – free trade / Obama – less free trade] could put trade liberalization on ice for a while.

The article highlights the travails of Oregon Sen. Gordon Smith, a free trade Republican. “Oregon is probably the most trade-dependent state in America,” Sen. Smith said. “Portland is called Portland because it’s a port.” Smith’s democratic challenger, Jeff Merkley, was hammering Smith on the “unfairness” of trade. The Democrats wanted more regulation written into trade deals.

President Bush’s efforts to win passage of trade deals with South Korea, Panama and Columbia stalled after trade concerns helped to put Democrats in charge of the House and Senate in 2006.

Most Democrats don’t call for blatant protectionist measures such as steep tariffs, or a return to import quotas such as those that governed automotive trade in the 1980s. Instead, Democrats, starting with presidential candidate senator Barack Obama, talk about the need for trade to be fair, and insist that trading partners be required to meet higher standards for environmental controls and worker’s rights to unionize.

Republican candidate Sen. John McCain is a free trader and has surrounded himself with like-minded advisers such as Stanford university economist John Taylor. …  Other McCain economic advisers, such as former Congressional Budget Office director Douglas Holtz-Eakin, former eBay Chief Executive Meg Whitman and former Hewlett-Packard Chief Executive Carly Fiorina are long-standing proponents of open markets.

Sen. Obama has hedged his bets on trade. On the stump, Sen. Obama talks about leveling the playing field, hitting South Korea often for tight import quotas on US automobiles. He opposes the free trade agreement with Columbia that is awaiting ratification, saying the Latin American country is still hostile to organized labor leaders. This week he pledged to pressure China to loosen control of its currency.

Some Democratic congressional leaders … remain supporters of free trade.

But free-trade critics like Ohio Sen. Sherrod Brown are sure to be emboldened if they have a big new block of trade skeptic votes to work with.

“Americans are anxious about job losses,” says the Ohio Democrat, who was elected to the Senate in 2006 after running a populist-tinged campaign.

Today, Trump Republicans sound much like the anti-trade fraction of the Democratic Party during the 2008 campaign.  In the January 25 online National Review Kevin Williamson wonders: Will the Liberals Take the Lead on Trade?

… Capitalism isn’t what it used to be.

And neither is free trade. Once largely an Anglo-American project, free trade today is a European project, a Canadian project, an Asian project, and a pan-Pacific and trans-Atlantic project, too. It is, properly understood, a global humanitarian project. For the moment, the leaders of that project are people such as Trudeau, Merkel, and Shinzo Abe. And Michelle Bachelet, too: The remarkable fact is that Chile’s socialist president is more pro-trade than is the nominally Republican president of the United States of America. There’s an opportunity here for Democrats, and one that isn’t limited to the specific question of trade. With the Republican party dominated by Trump-style populism and its harrumphing, nickel-and-dime, zero-sum approach to practically every public question, there is an opening for a party with an interest in reestablishing responsible American in global economic and diplomatic affairs, and to leave the Republicans grousing about whether the Belgians are two-tenths of a point short of their NATO funding commitments. “Leader of the Free World” is a heck of a job title. Maybe Justin Trudeau or Angela Merkel wants it. Narendra Modi surely does. Xi Jinping isn’t so hot on the “free” part, but he is happy to step into the vacuum left by the willful absenting of American leadership. What does Donald Trump want? To save Americans from excellent washing machines offered at reasonable prices. Liberals used to understand the value of free trade — of liberalism, properly understood. When the current populist convulsion has run its course, they may discover that it retains some interest.

One of our political parties needs to be the free-trade leader. Can the Republicans move back in the direction of free-trade?

*The WSJ was not foreshadowing President Trump’s Twitter habits.